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As an ecommerce company, your goal should be to keep your customers happy. To do this, the fulfillment of orders needs to be quick, free delivery should be standard and customer service should be something your customers can brag about. 

But even with all these things in line, returns are expected in any ecommerce business. Frequent returns negatively impact your profit margins but also destroy conversion rates, bring down customer loyalty and threaten the survival of your business as a whole. Developing and enforcing a strong returns policy is a must if you want your business to be successful.

Here is how to make sure returns do not ruin your business. 

What is the Average Return Rate for eCommerce?

If your warehouse is getting swamped by returns, you might find it comforting to know that you probably are not alone.

The average return rate for eCommerce is reported to be approximately 20%, increasing to up to 30% right after the Christmas buying season. Compare this to traditional brick and mortar stores, who on average see an 8-10% return rate, and it is easy to see why returns are a concern for eCommerce stores.

Here are some eCommerce return rate statistics might help shed some light on why returns are a problem for eCommerce companies:

  • 41% of consumers admit to buying multiple items with the intent to return at least one
  • 96% of consumers surveyed said that they will buy again if product return process is easy
  • 57% reported that they actually exchanged or replaced the last item they returned rather than being refunded, with 41% doing so from the same retailer
  • 69% said they would be put off making a purchase if they had to pay for return shipping

These numbers suggest that customers really do value being able to make quick and easy returns when making an order. Having a helpful returns policy can give customers the confidence to make their purchases, as well as even boost their loyalty if it goes well.

Why Do Customers Return Their Orders?

Before diving into how you can reduce ecommerce returns for your business, it is important to understand why customers are sending items back in the first place. Returns seem to be more of a struggle for online retailers who face an average return rate of over 20%, compared to 9% for their brick-and-mortar counterparts.  However, return rates vary depending on the type of goods. According to several studies, the items most affected by returns are clothing. 

Here are the most commonly cited reasons why customers return their goods in general:   

  • Damaged products    
  • Not as described    
  • Poor quality    
  • Customer bought the wrong item
  • Change of mind    
  • Issues with delivery    

Cost of Returns to Online Retailers

Reverse logistics can incur significant costs for retailers, though many of these aren’t immediately obvious. The cost of processing a return can be up to 65% of the total selling price, which can eat into your profit margins, especially if you’re offering free returns. 

When a product is returned, a retailer has to factor in the following costs: 

  • Labor: Every part of the returns process will have labor costs, including customer service, financial reconciliations, shipping, warehousing, restocking, and reselling. 
  • Reselling: If returned goods are to be sold again, they may need to be repaired or refurbished, then repacked and remarketed. 
  • Damaged Goods: If a product is returned in a damaged or unsaleable condition, it may have to be destroyed completely, which means the retailer eats the cost of the product and the return. 
  • Transportation: Getting returned goods back from a customer can involve significant costs – this might include paying for shipping services, packaging, and labels. 

5 Tips to Reduce Returns

1. Focus On Product Accuracy

The two main reasons shoppers return their online purchases are incorrect sizing or unmet product expectations. Both are often a result of the information presented online failing to reflect the true nature of the product. 

Accurately depicting, defining and describing products being sold via ecommerce is an effective way to improve the customer experience and minimize the volume of returns. Online shoppers are unable to try on or closely inspect their potential purchases, so it is the responsibility of retailers to provide the most helpful and accurate information possible. This includes detailed and thorough product descriptions, precise sizing charts, high-quality photos and a Q&A section.

Descriptions should contain an explanation of the product that differentiates it from similar items, bullet points describing the product’s key features and a call to action that encourages shoppers to make a purchase.

Given that sizing issues play an integral role in whether products are returned, it is particularly important to ensure that they contain accurate and up-to-date information. Some websites enable shoppers to enter body type, weight and height data and personal fit preferences to provide personalized sizing suggestions. 

By including multiple photos using various angles, distances and lighting, shoppers can closely examine products and more fully imagine how they might use them. That helps bridge the gap between consumer expectations and product reality. 

2. Pack Your Items Securely

Damaged products are among the main reasons for returning items. In fact, it is the second main reason for returning online purchases in the US in 2021. Although quality control can make sure that no damaged product leaves your warehouse, it is usually not enough to guarantee that your package will reach your customer in one piece.     

Once the package leaves your warehouse, quality control is challenging because your delivery carrier plays a big role in this part. Yet, there are extra steps you can take to minimize the chances of damage when the item is being shipped. 

To reduce the risk of damage during transport, you can also consider:    

  • Using protective material, such as bubble wrap, in a delicate package    
  • Adding Fragile labels to parcels with easily breakable items inside     
  • Using the correct parcel size so items do not jostle around in transit    
  • Tracking and insuring your packages    

3. Maximize Your Customer Reviews

Customers often prefer to learn more about a product from their friends and peers than they would from the brand itself—especially if it is their first-time ordering from that retailer. Let customers learn more about your product from other real-life customers who have now received their order and can attest to the quality of the item. 

You could take it a step further and ask customers who have recently placed an order from you to include their own photos with their reviews. This not only works as valued social proof, but helps you gather even more product images to really give your customers a sense of what your product looks like.

Most of the time, you just need to ask customers to leave honest reviews. Send them an email soon after they have received their order and ask them to share their feedback on your website. This is a great opportunity to use a customer loyalty program that rewards your customers for leaving reviews.

4. Implement Flexible and Reasonable Return Policies

More than half of online shoppers have decided against making a purchase due to a company’s poor return policy or the anticipation of a difficult return process, so a fair and flexible return policy is invaluable. It can benefit businesses financially by both boosting sales and preventing returns. 

Generous, customer-focused return policies that allow buyers to make purchases confidently, knowing that they can return products hassle-free and quickly, build brand trustworthiness, reduce customer cart abandonment and increase conversion rates. 

While establishing trust with customers is necessary to reduce the costs associated with returns, implementing an overly generous policy that fails to account for individuals who abuse it will end up costing businesses more money. It is important to find the right balance.

5. Focus On Customer Service

Customer service is a surefire way to avoid product returns. If customers have issues with your products, it is better to have them reach out than simply returning an item. More often than not, questions can be cleared up over the phone or by email. Live chat is also a great way to interact with customers.

Please remember that great customer service starts with being there for customers. Customers value companies that take the time to answer their questions and address their concerns. Be clear about your willingness to provide support. Encourage customers to reach out before returning items. Post-sales emails are a great way to let customers know you’re there if they need you.

The FLEX Logistics Team is Here to Help!

Our team understands the importance of getting your products to the market. That is why we aim to understand your business and build lasting relationships with you and your team. ​Whether you are looking to add a new warehouse to your existing operations, growing and need to increase your distribution efforts, or starting a new company, FLEX has the solutions to meet your supply chain needs.

Contact us today to discuss your current and future warehousing and logistics needs.  We will work together with you to understand your requirements and develop a solution that will set you up for future success.


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